Coal holds massive export potential

South Africa has the potential to increase coal exports to 110 million tonnes per year, some 35 million tonnes more than the current export figure. According to Henk Langenhoven, chief economist of the Minerals Council of South Africa, an additional 35 million tonnes would result in 11600 additional jobs. “Coal remains the largest component of mining by sales value and is a critically important source of primary energy that drives the economy,” said Langenhoven. But the industry is under pressure, challenged by poor policy cohesion. “Eskom’s 51% broad-based black economic empowerment requirement versus the 30% for the Mining Charter is but one example,” said Langenhoven. “Rail tonnage constraints and the large investments required to exploit the Waterberg reserves are also challenges that would need to be overcome to
increase exports.” Coal, said Langenhoven, would continue to play a vital role in the South African economy as it would remain the primary source to generate base power for years to come. The latest Integrated Resource plan estimates coal consumption by Eskom will rise from the current 120 million tonnes per year to around 139 million tonnes by 2023. It will then decline to the current level by 2033, declining further to around 90 million tonnes per year until 2050. While this is a reduced figure it still represents a large amount of the commodity. “Taking into consideration the declining life of several coal mines, quite a number will have to be replaced,” said Langenhoven. “Estimates indicate that R20 billion worth of investment is needed to keep supplying Eskom with coal.”